Luxury apartment prices to drop up to 20% in 2009

Luxury apartments around the city were sold between RM560 and RM1,400 per square foot in 2008, it said. The number of units put up for sale last year dropped 43% to 993, from 1,727 in 2007, and the full effect of the crisis is expected in the second half, the company’s property market report released yesterday showed.

The government is expected to introduce a second stimulus plan next week, adding to the RM7 billion announced in November to help spur the economy. Political uncertainty after the government’s worst performance in the elections a year ago may also delay a recovery, he added.

Homebuyers will adopt a “cautious mood” as they expect prices to fall further, while developers may delay the rollout of new projects until the economy improves, the report said.

“Most developers are still adopting a wait-and-see attitude, how the picture is going to unfold in the global scene,” Goh said. “All the experts in the world can’t say when the economy is going to recover.”

Home buyers should purchase their properties this year as developers will be more willing to cut prices, and lending rates will be lowered after the central bank reduced borrowing costs last week, Goh said. — Bloomberg